The present invention relates generally to determining market predictability for one or more products and more specifically to calculating market predictability factors for determining underlying product development decisions.
In current operations, decisions made relating to product development is based on a wide variety of factors. One common approach is solving a need for a particular market. Product development relating to a market need is typically dictated by customer feedback or a recognition of missing solutions in the marketplace.
As the complexity of some products continues to increase, so does the inherent cost associated with developing a product. Costs are also associated in developing prototypes or commonly called “beta” versions with which a product may be tested. It is often beneficial to have a realistic understanding of the marketability of a product as early in the decision process as possible, especially in markets where profits can drive development and/or production decisions.
Certain areas of products are especially prone to high development or start-up costs. It can be extremely risky for a person or company to invest various resources, such as money and man-power, into a product that may end up having limited market value. One common product having significant development costs is software. Applications must be developed, typically by a team of software engineers. From a business perspective, just as important as the proper operation of the software is the marketability of the underlying software.
This issue is especially true in the example of software with enterprise applications. These enterprise applications provide a general framework for performing numerous operations, but are often specialized to a particular industry. As different industries include different requirements, it can be expensive to develop industry specific applications without a clear understanding of the market to which the software is applicable.
Current techniques for determining potential marketability for a particular product involve business calculations. These calculations may include empirical industry specific data. From this data, business calculations may be made generally estimating a products marketability. For example, a simple calculation may be estimating the total number of customers in an industry with a percentage factoring the number of customers to whom the company can expect to sell its product. Taking that portion of the industry, the company performs further calculations to determine a price point estimating the projected cost of the product. Based on this price point and estimate sales volume, an income amount may be projected.
This current technique is extremely subjective and can be prone to calculation errors. For example, the definition of a particular industry may be in error or there may be a miscalculation of the potential number of future customers. Additionally, this technique is predicated on a selected market and then a corresponding determination for that market. Therefore, should a person wish to compare a large number of potential markets, that would require not only the calculations for each market, but the significant research required to obtain accurate values for each market-based calculation.
Therefore, the current techniques for determining a product's marketability require a per-market determination. These determinations require extensive amounts of data collection for each calculation and may be potentially subject to problems associated with incorrect data. As such, when product development is determined based in part on the marketability of that product, development may be hindered by the currently complex and imprecise market data estimations.